Senate Bill sb2414c2

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    Florida Senate - 2007                    CS for CS for SB 2414

    By the Committees on Governmental Operations; Higher
    Education; and Senator Ring




    585-2293-07

  1                      A bill to be entitled

  2         An act relating to commercialization of

  3         university research; creating s. 288.956, F.S.;

  4         providing legislative intent for the Sure

  5         Ventures Commercialization Program; creating s.

  6         288.9561, F.S.; creating Sure Ventures

  7         Commercialization, Inc., a not-for-profit

  8         corporation in the Office of Tourism, Trade,

  9         and Economic Development; requiring Enterprise

10         Florida, Inc., to provide administrative

11         support to the corporation and be its successor

12         in interest; providing for its administration

13         by a board; providing for appointment of board

14         members; providing for terms; providing for

15         service without compensation; providing for

16         reimbursement for travel and per diem expenses;

17         providing criteria for membership; providing

18         for powers and duties of the corporation;

19         providing for hiring employees; providing for

20         meetings of the corporation; authorizing the

21         corporation to invest funds through the State

22         Board of Administration; providing for

23         contracts with state universities; requiring

24         the corporation to prepare and deliver an

25         annual report to the Governor and the

26         Legislature by a specified date; detailing the

27         content of the report; providing for exclusion

28         of liability of state entities; creating s.

29         288.9562, F.S.; creating the Sure Ventures

30         Commercialization Grant Program; providing for

31         the types of grants that may be made to state

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 1         universities for the commercialization of

 2         research projects; creating s. 288.9563, F.S.;

 3         providing for grant application and approval

 4         procedures; providing appropriations; providing

 5         an effective date.

 6  

 7  Be It Enacted by the Legislature of the State of Florida:

 8  

 9         Section 1.  Section 288.956, Florida Statutes, is

10  created to read:

11         288.956  Sure Ventures Commercialization Program.--

12         (1)  The Sure Ventures Commercialization Program is

13  established in the Office of Tourism, Trade, and Economic

14  Development for the purpose of financing the commercialization

15  of products and services developed from the research and

16  development conducted at public universities in this state.

17  The purpose of the program is to enhance the economy of this

18  state by:

19         (a)  Converting products from research performed at

20  public universities into viable consumer products; and

21         (b)  Precipitating the formation of new Florida

22  companies to further develop and sell those products in the

23  commercial marketplace.

24         (2)  The Sure Ventures Commercialization Program is

25  designed so that a public university can apply for funding

26  from Sure Ventures Commercialization, Inc., in order to

27  commercially develop products and services resulting from

28  research at the university. Funding from the Sure Ventures

29  Commercialization Trust Fund may be used for a variety of

30  premarketing activities, including, but not limited to,

31  securing patents, establishing start-up companies, developing

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 1  license agreements, attracting private investment, and

 2  supporting other activities that are necessary to establish

 3  commercially viable ventures for the marketing and sale of

 4  products. Funds may not be used for research or development.

 5         Section 2.  Section 288.9561, Florida Statutes, is

 6  created to read:

 7         288.9561  Sure Ventures Commercialization, Inc.--

 8         (1)  CREATION.--There is created Sure Ventures

 9  Commercialization, Inc., a not-for-profit corporation, which

10  shall be registered, incorporated, organized, and operated

11  under chapter 617 with Enterprise Florida, Inc., as its sole

12  member or stockholder.

13         (a)  The corporation is not a unit of state government

14  or a political subdivision of the state. However, the

15  Legislature declares that the corporation is subject to s. 24,

16  Art. I of the State Constitution and chapter 119, relating to

17  public records, and the provisions of chapter 286 relating to

18  public meetings and records. Furthermore, all officers,

19  directors, and employees of the corporation must comply with

20  the code of ethics for public officers and employees under

21  part III of chapter 112.

22         (b)  The corporation shall adopt suitable articles of

23  incorporation and bylaws and must establish at least one

24  corporate office in this state and appoint a registered agent.

25  Notwithstanding the powers granted under chapter 617, the

26  corporation may not adopt, amend, modify, or repeal a bylaw or

27  article of incorporation without the express written consent

28  of Enterprise Florida, Inc.

29         (c)  The corporation may hire or contract for all

30  personnel necessary to properly execute the powers and duties

31  bestowed upon it within the funds appropriated to implement

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 1  ss. 288.956-288.9566. Using funds appropriated to implement

 2  this section, the corporation may not expend more than $1

 3  million each year for personnel and necessary administrative

 4  expenditures, including, but not limited to, travel and per

 5  diem, legal fees, consultant's fees, rents and utilities, and

 6  audit fees.

 7         (d)  Subject to appropriations, Enterprise Florida,

 8  Inc., shall contract to provide administrative support to the

 9  corporation as requested by the corporation. If the

10  corporation is dissolved, Enterprise Florida, Inc., becomes

11  the corporation's successor in interest and assumes all

12  rights, duties, and obligations of the corporation under any

13  contract to which the corporation is then a party and under

14  law.

15         (2)  PURPOSE.--The corporation shall be organized to

16  administer a commercialization grants program as defined in

17  this act with funding from the Sure Ventures Commercialization

18  Trust Fund, and the corporation may receive, hold, invest,

19  administer, and disburse funds appropriated by the

20  Legislature.

21         (3)  BOARD; MEMBERSHIP.--The corporation shall be

22  governed by a board of directors.

23         (a)  The board of directors shall consist of nine

24  voting members, of whom the Governor shall appoint three, the

25  President of the Senate shall appoint three, and the Speaker

26  of the House of Representatives shall appoint three.

27         (b)  As a candidate to be selected to the board of

28  directors, an individual must have prior experience with and

29  demonstrated expertise and competence in early stage business

30  investment, corporate management, the fiduciary management of

31  investment funds, or the commercialization of research

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 1  products. The individual must also demonstrate competence with

 2  respect to the administration and management of a publicly

 3  listed company, or experience and competence in public

 4  accounting, auditing, and fiduciary responsibilities. A board

 5  member may not have an interest in any grant proposal

 6  submitted to the corporation.

 7         (c)  Each member of the board of directors shall be

 8  appointed to a term of 4 years, except that for the initial

 9  appointments the Governor, the President of the Senate, and

10  the Speaker of the House of Representatives each shall appoint

11  one member for a term of 1 year, one member for a term of 2

12  years, and one member for a term of 4 years in order to

13  achieve staggered terms among the members of the board. A

14  member is not eligible for reappointment to the board, except

15  that a member appointed to an initial term of 1 year or 2

16  years may be reappointed for an additional term of 4 years,

17  and a person appointed to fill a vacancy having 2 years or

18  less remaining on the term may be reappointed for an

19  additional term of 4 years. The Governor, the President of the

20  Senate, and the Speaker of the House of Representatives shall

21  make their initial appointments to the board by October 1,

22  2007.

23         (d)  The Governor, the President of the Senate, or the

24  Speaker of the House of Representatives, respectively, shall

25  fill a vacancy on the board of directors, according to who

26  appointed the member whose vacancy is to be filled or whose

27  term has expired. A vacancy that occurs before the scheduled

28  expiration of the term of the member shall be filled for the

29  remainder of the unexpired term. A board member whose term has

30  expired shall continue to serve until his or her replacement

31  has been appointed.

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 1         (e)  Each member of the board of directors who is not

 2  otherwise required to file financial disclosure under s. 8,

 3  Art. II of the State Constitution or s. 112.3144 shall file

 4  disclosure of financial interests under s. 112.3145.

 5         (f)1.  A person appointed to the board of directors

 6  must agree to refrain from having any direct interest in any

 7  contract, franchise, privilege, or other benefit arising from

 8  a university project receiving financing from the board during

 9  the term of his or her appointment and for 2 years after the

10  termination of the appointment.

11         2.  If a person accepts a direct interest in any

12  contract, franchise, privilege, or other benefit granted by

13  the institution, an affiliate, or a corporation benefited by

14  Sure Ventures Commercialization Grant proceeds within 2 years

15  after the termination of his or her service on the board, the

16  person commits a misdemeanor of the first degree, punishable

17  as provided in s. 775.083 or s. 775.084.

18         (g)  Members of the board of directors shall receive no

19  compensation for their services, but are entitled to receive

20  reimbursement for travel and per diem expenses incurred in the

21  performance of their duties as provided in s. 112.061.

22         (h)  Each member of the board of directors is

23  accountable for the proper performance of his or her duties of

24  office, and each member owes a fiduciary duty to the people of

25  the state to ensure that funds provided in furtherance of this

26  section are disbursed and used as prescribed by law and

27  contract and in the best interests of the state.

28         (i)  The Governor, the President of the Senate, or the

29  Speaker of the House of Representatives, according to which

30  officer appointed the member, may remove a member for

31  malfeasance, misfeasance, neglect of duty, incompetence,

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 1  permanent inability to perform official duties, unexcused

 2  absence from three consecutive meetings of the board, arrest

 3  or indictment for a crime that is a felony or a misdemeanor

 4  involving theft or a crime of dishonesty, or pleading nolo

 5  contendere to, or being found guilty of, any crime.

 6         (4)  ORGANIZATION; MEETINGS.--

 7         (a)1.  The board of directors shall annually elect a

 8  chairperson and a vice chairperson from among the board's

 9  members. The members may, by a vote of five of the nine board

10  members, remove a member from the position of chairperson or

11  vice chairperson before the expiration of his or her term as

12  chairperson or vice chairperson. His or her successor shall be

13  elected to serve for the balance of the removed chairperson's

14  or vice chairperson's term.

15         2.  The chairperson shall ensure that records are kept

16  of the proceedings of the board of directors and is the

17  custodian of all books, documents, and papers filed with the

18  board; the minutes of meetings of the board; and the official

19  seal of the corporation.

20         (b)1.  The board of directors shall meet upon the call

21  of the chairperson or at the request of a majority of the

22  members, but not less than twice each calendar year if a

23  university request for funding under this section is pending.

24         2.  A majority of the voting members of the board of

25  directors constitutes a quorum. Except as otherwise provided

26  in this section, the board may take official action by a

27  majority vote of the members present at any meeting at which a

28  quorum is present. Members may not vote by proxy.

29         3.  A member of the board may participate in a meeting

30  of the board by telephone or videoconference through which

31  each member may hear every other member, if the meeting and

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 1  any call-in number is duly noticed and the meeting is held at

 2  a place certain that is accessible to the public.

 3         (5)  POWERS AND DUTIES.--The corporation shall be

 4  organized to receive, hold, invest, administer, and disburse

 5  funds appropriated by the Legislature in support of ss.

 6  288.956-288.9566 and to disburse any income generated from the

 7  investment of these funds consistent with the purpose and

 8  provisions of this section. Notwithstanding the powers granted

 9  under chapter 617, the corporation may not increase or

10  decrease the number of directors on the board; borrow funds;

11  issue notes, bonds, or other obligations; or secure any

12  obligation by mortgage or pledge of the corporation's

13  property, franchise, or income. The corporation:

14         (a)  May perform all acts and things necessary or

15  convenient to carry out the powers expressly granted in ss.

16  288.956-288.9566.

17         (b)  Shall make expenditures from funds provided by

18  this state consistent with the powers of the corporation.

19         (c)  Shall indemnify, and purchase and maintain

20  insurance on behalf of, directors, officers, and employees of

21  the corporation against any personal liability or

22  accountability.

23         (d)  Shall disburse funds under this section and a

24  contract entered into between the corporation and a

25  university.

26         (e)  Shall receive and review reports and financial

27  documentation provided by a university to ensure compliance

28  with this section and the contract.

29         (f)  Shall prepare an annual report as prescribed in

30  subsection (8).

31  

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 1         (6)  INVESTMENT OF FUNDS.--The corporation may enter

 2  into an agreement with the State Board of Administration under

 3  which funds received by the corporation which are not

 4  disbursed to a university or invested must be invested by the

 5  State Board of Administration on behalf of the corporation.

 6  Funds shall be invested in suitable instruments authorized

 7  under s. 215.47 and specified in investment guidelines

 8  established and agreed to by the State Board of Administration

 9  and the corporation.

10         (7)  CONTRACTS FOR THE AWARD OF GRANTS.--

11         (a)  The corporation shall negotiate and execute

12  contracts with universities governing the terms of grants

13  provided under ss. 288.956-288.9566. Grants must be approved

14  by a two-thirds vote of the board of directors when a quorum

15  is present at a duly noticed meeting.

16         (b)  Each contract, at a minimum, must contain

17  provisions:

18         1.  Specifying the procedures and schedules that govern

19  the disbursement of funds under this section and specifying

20  the conditions or deliverables that the university must

21  satisfy before the release of each disbursement.

22         2.  Requiring the university to expend 95 percent of

23  grant proceeds for described uses in the approved grant

24  application and not otherwise reduce grant proceeds with

25  facilities charges or fees by the university.

26         3.  Requiring the university to submit data to the

27  corporation concerning the activities and performance of

28  projects funded under this section and to provide to the

29  corporation an annual accounting of the expenditure of funds

30  disbursed under this section by August 1 of each year until 1

31  year elapses from the university's final disbursement of all

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 1  grant funds received from the Sure Ventures Commercialization

 2  Program.

 3         (8)  ANNUAL REPORT.--By December 1 of each year, the

 4  corporation shall prepare a report of the activities and

 5  outcomes under ss. 288.956-288.9566 for the preceding fiscal

 6  year and submit the report to the Governor, the President of

 7  the Senate, and the Speaker of the House of Representatives.

 8  The report, at a minimum, must include:

 9         (a)  An accounting of the amount of grants awarded and

10  disbursed during the preceding fiscal year by project and

11  university.

12         (b)  Project level summaries of the information

13  reported by grant recipients in paragraph (7)(b).

14         (c)  A description of the benefits to this state

15  resulting from the grant program, including the number of

16  businesses created, associated industries started, and the

17  growth of related research projects at the university.

18         (d)  An independent audit of the corporation's

19  financial statements, which must include a statement of

20  operations that reports receipts and expenditures during the

21  preceding fiscal year for personnel, administration, and

22  operational costs of the corporation.

23         (e)  A description of those projects funded by the

24  grant program in which two or more universities are working

25  cooperatively together to avoid duplicating the activities,

26  programs, and functions of the cooperating universities and to

27  leverage the expertise offered by other universities.

28         (9)  LIABILITY.--

29         (a)  The appropriation or disbursement of funds under

30  this section does not constitute a debt, liability, or

31  obligation of the state, any political subdivision thereof, or

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 1  the corporation, or a pledge of the faith and credit of the

 2  state or of any political subdivision.

 3         (b)  The appropriation or disbursement of funds under

 4  this section does not subject the state, any political

 5  subdivision, or the corporation to liability related to the

 6  research activities, commercialization activities, and

 7  research products that receive funding under this section.

 8         (10)  DEBT.--The corporation may not incur debt. This

 9  prohibition includes long-term leases, promissory notes,

10  loans, lease-purchase agreements, certificates of

11  participation, the sale of bonds or revenue bonds, or the

12  award or commitment to award grants in excess of the

13  unencumbered cash balance in the Sure Ventures

14  Commercialization Trust Fund.

15         Section 3.  Section 288.9562, Florida Statutes, is

16  created to read:

17         288.9562  Sure Ventures Commercialization Grant

18  Program.--The Sure Ventures Commercialization Grant Program is

19  established to provide early stage capital funding from the

20  Sure Ventures Commercialization Trust Fund in support of the

21  commercialization of university research products. Grants from

22  the Sure Ventures Commercialization Trust Fund shall be

23  disbursed under the following categories:

24         (1)  Phase One grants, which may not exceed $50,000 per

25  project, may be used to assist with early market research,

26  independent evaluation, consultation, and other initial

27  activities that may be required to develop an initial business

28  model for a university research product having the potential

29  for commercialization.

30         (2)  Phase Two grants, which may not exceed $100,000

31  per project, may be used to match private investment in a

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 1  university research commercialization proposal. The university

 2  proposal must have been successfully evaluated and developed

 3  into a level of readiness contemplated for projects that have

 4  received Phase One grants. Phase Two grants shall be used to

 5  develop a complete business plan for the commercialization of

 6  a university research product. For a Phase Two grant proposal,

 7  the university must document the availability of $1 in private

 8  support for each $1 in state funding requested.

 9         (3)  Phase Three grants, which may not exceed $250,000

10  per project, may be used to match private investment relating

11  to the implementation of a completed business plan for a

12  university research product. For a Phase Three grant proposal,

13  the university must document the availability of $1 in private

14  support for each $1 in state funding requested.

15         Section 4.  Section 288.9563, Florida Statutes, is

16  created to read:

17         288.9563  Sure Ventures Commercialization grants;

18  application and approval procedures.--

19         (1)  A university, or any two or more universities,

20  upon approval by an authorized officer of the university, may

21  submit a request to Sure Ventures Commercialization, Inc., for

22  a grant to facilitate the commercialization of a university

23  research product or the commercialization of a patent held by

24  a university.

25         (2)  Subject to the availability of trust funds, the

26  corporation shall periodically solicit specific proposals from

27  universities for grants to be funded by the corporation.

28         (a)1.  The corporation shall meet at least once every 6

29  months for the purpose of evaluating the grant proposals and

30  for awarding grants if the uncommitted balance in the Sure

31  Ventures Commercialization Trust Fund exceeds $750,000.

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 1         2.  The minimum time between the date when the notice

 2  for the solicitation for proposals is issued and the date when

 3  the finished proposal is received by the corporation may not

 4  be less than 60 days. The corporation must approve or deny a

 5  completed proposal not more than 60 days after receiving the

 6  proposal.

 7         3.  The board of directors, by a majority vote, may

 8  increase the time allotted to approve or deny the submitted

 9  proposals by an additional 60 days when complex proposals

10  require additional time for proper evaluation.

11         (b)1.  The board shall establish guidelines to

12  implement the criteria established in this section and to

13  establish the format for proposed projects submitted by

14  universities.

15         2.  A university need not receive prior stage grants to

16  be eligible for phase two or phase three grants.

17         (3)  When evaluating the projects submitted for funding

18  support through Sure Ventures Commercialization, Inc., the

19  board must consider the following criteria:

20         (a)  The potential return to the university which may

21  be reasonably assumed based on the business case presented in

22  support of the proposed project;

23         (b)  The potential for the creation of high-wage jobs

24  resulting from the success of the proposed project;

25         (c)  The potential of the proposed project to address a

26  strategic need of the state as set forth in the statewide

27  strategic plan for economic development prepared by Enterprise

28  Florida, Inc.;

29         (d)  The potential of the proposed project to

30  "spin-off" other related business enterprises;

31  

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 1         (e)  The potential of the proposed project to enhance

 2  the economic competitiveness of the state and the university;

 3  and

 4         (f)  The technical, financial, organizational, and

 5  marketing feasibility of the project and its business plan.

 6         (4)  The proposed project must be evaluated on its

 7  individual merits.

 8         Section 5.  The nonrecurring sum of $1 million is

 9  appropriated from the General Revenue Fund to Sure Ventures

10  Commercialization, Inc., for the 2007-2008 fiscal year for the

11  purpose of creating and organizing the corporation and

12  implementing a grant program as defined in this act.

13         Section 6.  The nonrecurring sum of $10 million is

14  appropriated from the General Revenue Fund to the Sure

15  Ventures Commercialization Trust Fund for the purpose of

16  implementing the provisions of this act during the 2007-2008

17  fiscal year.

18         Section 7.  This act shall take effect July 1, 2007.

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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                            CS/SB 2414

 3                                 

 4  Establishes the Sure Ventures Commercialization Program in the
    Office of Tourism, Trade and Economic Development.
 5  
    Limits authority of the Sure Ventures Commercialization, Inc.,
 6  to amend, modify or repeal a bylaw or article of incorporation
    without express written consent of its sole shareholder or
 7  member, Enterprise Florida, Inc.

 8  Eliminates authority to pay for "necessary expenses" and
    requires compliance with travel and per diem requirements of
 9  s. 112.061, F.S.

10  Requires board meetings that are held by telephone or
    videophone conference to provide notice of the call-in number
11  and to establish a place certain that is accessible to the
    public to attend the meeting.
12  
    Limits the corporate authority of the corporation by
13  prohibiting it from increasing or decreasing the number of
    directors on the board, from borrowing funds, issuing notes,
14  bonds or other obligations, or from securing obligations by
    mortgage, pledge of corporate property, franchise or income.
15  
    Removes redundant expressions of other corporate authority
16  that were reiterated in the bill.

17  Modifies the criteria for evaluating projects by linking state
    needs to the statewide strategic plan prepared by Enterprise
18  Florida, Inc.

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